RE agent legalities. Seller/buyer commission

[berong]

Scenario is... a real estate agent has a potential development site for sale and a buyer wants to control it through a no money down deal. Eg Options, JV etc.

Does it breach any of the real estate code if the buyer offers to pay for the RE commission instead of the seller. Buyer pays agents commission upon unconditional contract rather settlement. Unconditional would say be 2 weeks and settlement 6 months.

To get the agent to push your offer he would need to get paid sooner and more $ than a sale the traditional sale when the seller paying commission.

Site is for sale for $1m so plenty of upside after a DA. $25k in agents commission is negligible in the scheme of things.

Anyone used this and legal?

 

[superAndrew]

I don't understand why you would do that. Why don't you just put in an offer?

The agent represents the sellers interest and has to get the best price for the seller. If he does other wise then it is illegal.

Cheers

Andrew

 

[berong]

The reason I would try and use this is for 2 reasons -
1. longer settlement to get DA or
2. for an option on the property and on sell with DA.

Say there's an offer from someone else of $1m and 30 days (15 days due diligence and 15 days settlement).

If I offered $1.1m and 15 days DD and 12 month settlement, do you really think the agent will want to wait 12 months for his money when he could get slightly less commission in 1 month from the other buyer.

As for an option - I would be offering $1.2m and 12 months . Same 15 days DD applies but I (the buyer) pays the agent at the end of DD.

On both concepts I pay the agent at the end of 15 day DD. Agent is happy gets his money in 15 days and seller gets $100k - $200k more.

 

[Propertunity]

Does it breach any of the real estate code if the buyer offers to pay for the RE commission instead of the seller. Buyer pays agents commission upon unconditional contract rather settlement.
Anyone used this and legal?

This would be a breach of the Act by the agent. The selling agent has (presumably) an agency agreement with the seller (vendor). He cannot also act for and be paid by the buyer, even if he does not charge the seller a commission. Sorry

There is nothing stopping the selling agent from acting as a buyers agent, and signing up you as a client, where you pay him a buying fee. However, the agent cannot receive a commission from and act for both the seller and the buyer of the same property.

 

[belvoir]

Take a leaf out of the book of our NSW politicians. Brown paper bags get things done, thats how this country works.